Andreea Andrei

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University of West London *

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PRINCIPLES

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Business

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Nov 24, 2024

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docx

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MODULE: INTRODUCTION TO BUSINESS Student: Andreea Andrei EXECUTIVE SUMMARY

Through the Pestle and Porter model, I will analyze the microeconomic environment and macroeconomic environment through the business I have chosen. Specifically, I intend to determine what factors affect profitability and to gather information regarding competitors and threats a director faces when deciding to start a business. I will also analyze the most important data from an internal and external perspective. INTRODUCTION Our business idea is to open a store that sells flowers of all kinds. We are located in central London, which is a very popular tourist destination. Our main goal is to open this store and expand to other cities. Our business structure is a partnership because we are a team of four people and we know that together we will grow faster. In order for the business to be successful, we will try to gather as much information as possible to make the right decisions. IBISWorld expects specialist flower retailers' performance to improve over the next five years, albeit at a moderate rate, as competition is expected to remain fierce. Due to the skills required for complex floral arrangements and catering for weddings, funerals, and other functions, the specialised nature of flower retailing is likely to ensure that florists maintain a strong presence in the market. Over the next five years, the growing number of online florists is expected to support industry revenue growth (Ibisworld.com, 2019). BODY We decided to open a flower shop where we would sell freshly picked flowers. We want to stand out from the competition in the market, and we want to approach the best strategies for attracting potential customers. To accomplish everything we set out to do, we need some internal and external information to help us plan, make the right decisions, and effectively control the various types of activities in our company (Nikolai Janoschek, 2018). Our first concern as a business startup is our market of operation. Managers need information about the size of the market, about the clothing industry, and, perhaps most importantly, about the two players on the market, namely potential customers and potential competitors. As soon as all this information has been recorded, the business owner can make some strategic decisions, as he will know not only the needs of the customers but also the products and services offered by the competition. He will be able to decide which methods will bring success. Using information about the market, he can conduct a SWOT analysis to identify his strengths, in relation to his competition, as well as development opportunities and decide what are the company's objectives and how it will control its activities to fulfil these objectives. In his role as a business owner, he is responsible for financing the company. To do this, we need internal information on the costs of entering the market, a sufficient budget and the possibility of expanding the capital. Once he has completed all these aspects, he will be able to plan his activity and decide how he can get more money for the initial investment, as well as what accounting operations will be required. We will need quite a lot of capital as a business that will deal with the sale of flowers, because we will need equipment for their packaging and maintenance and, most importantly, raw materials, which we will buy from different suppliers.

Furthermore, once things are taking shape, the director ought to obtain information on the best marketing strategies (Joy, 2016). Our business can easily be promoted online since we can create websites or applications that let customers see the flowers we sell. To determine how much to invest in promotion and which methods to use, we will need to know the implementation costs and their impact on customers. MICROENVIRONMENTAL ANALYSIS POLITICAL FACTORS The government encourages companies to buy raw materials, such as flowers from foreign countries, because it will increase the rate of imports. We also need certain licenses or permits for the location and products to operate properly. ECONOMIC FACTORS As the economy changes, certain factors can have an impact on the flower industry, such as the unemployment rate in an area or the income of the population living in that area. Because we can work with the population because they are our customers, if they do not have at least a minimum income, they will not be able to spend money on our flowers because they can find them in other areas for free and use the income to pay bills or buy food. If the government raises the minimum wage in the economy, people will be willing to spend, and then our profits will increase. TECHNOLOGICAL FACTORS Companies show flowers for various occasions that people should buy as soon as possible, in video ads, which have a major impact on sales. The lifestyle of the population is an important determinant and can have a direct impact on our business. Also, each person may have a different opinion about flowers, there are women who love to grow flowers and buy as many flowers as possible and other people who do not want to take care of them and do not use our services. We can also focus on the behavior of people who like to give a flower as a gift for different occasions, so it is important to meet their needs and try to satisfy as much of the population as possible. (PESTLE - Macro Environmental Analysis, 2016) People love online shopping because it's convenient. Rather than visiting crowded flower shops, most people prefer to browse an online catalog to view up close the item they want to buy. Marketing with technology reaches the most customers, as we can use mobile apps, social media ads, and TV commercials, which have a great impact on customers. LEGAL FACTORS In order to succeed, we must follow the same legal rules and regulations that apply to any new business. To do this, we need to follow tax restrictions and ensure that workers' rights are respected. MACRO ENVIRONMENTAL ANALYSIS

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Through Porter's Analysis, we can understand how competitive the industry we are entering is as well as how profitable our business can be. I will analyze the five factors relevant to my business. (Fern Fort University, n.d.) BARGAINING POWER OF BUYERS As a retailer, the bargaining power of the buyer is important since they may choose to lower prices, not to buy our products, or to find other retailers. In our case, there are many stores that sell similar goods, so the power of the buyer is very high. BARGAINING POWER OF THE SUPPLIER In our industry, the bargaining power of the supplier is quite small and I consider it very insignificant for our store because many of the flower shops, as well as ourselves, we buy products from foreign producers such as the Netherlands for tulips or we turn to local producers. for classic flowers. RIVALRY Competitive rivalry is quite high for our florist, as there are other retailers who sell products that are very similar to ours, but we can differentiate ourselves if we bring unique flowers from all over the world or we manage to adapt a much more interesting way of making bouquets. of flowers THE THREAT OF NEW ENTRANTS The threat of new entrants is quite high because anyone can start selling flowers at a store or in the market. Entry costs are very easy to understand and do not require much legal action. THE THREAT OF SUBSTITUTABLE The threat of replacement products fortunately for us is quite small because there are few products to replace the unique flowers we bring. However, people can turn to flowers sold in supermarkets or local markets and then the threat begins to be serious. Thanks to this analysis, we have come to the conclusion that suppliers are a low threat to us and have low bargaining power, while buyers have a high bargaining power, many options and competitors in the market can hinder our success. CONCLUSION All of these factors have demonstrated the importance of analyzing all the information before making a decision, as well as the factors that can influence the effectiveness of the business. Because of the intense competition, it's quite difficult to maintain a healthy position in the market. You'll need a lot of techniques to achieve this. When you are starting a business, you may encounter a lot of difficulties, but if you are competitive, you can overcome them. It is imperative for employers to understand their market position and future levels of success through Porter's and Pestel's analysis in a start-up business.

REFERENCE LIST Contributor, P., 2015. PESTLE Analysis: Business Environmental Analysis. [online] PESTLE Analysis. Available at: <http://pestleanalysis.com/pestle-analysis-business-environmental- analysis/> [Accessed 10 June 2016]. Fern Fort University. (n.d.). 1-800-FLOWERS.COM, Inc. PESTEL / PEST & Environment Analysis[Strategy]. [online] Available at: http://fernfortuniversity.com/term- papers/pestel/nyse4/2785-1-800-flowers-com--inc-.php. Ibisworld.com. (2019). IBISWorld - Industry Market Research, Reports, and Statistics. [online] Available at: https://www.ibisworld.com/united-kingdom/market-research- reports/florists-industry/ . Nikolai Janoschek (2018). BI Survey . [online] BI Survey. Available at: https://bi- survey.com/data-sources . Joy, D., 2016. Internal Factors that May Affect the Business Organization. [online] linkedin. Available at: <https://www.linkedin.com/pulse/internal-factors-may-affect-business- organization-dr-turner-joy> [Accessed 8 April 2016]. Kotler, P., Keller, K., Brady, M., Goodman, M. and Hansen, T., 2009. Marketing management. Harlow, England: Prentice-Hall. Oxlearn.com. 2016. PESTLE - Macro Environmental Analysis. [online] Available at: <http://www.oxlearn.com/arg_Marketing-Resources-PESTLE---Macro-Environmental- Analysis_11_31> [Accessed 10 June 2016].

Andreea Andrei

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